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March 19, 2001 Issue Full Text
A half-billion-dollar claim

Ottawa once tried to weasel an Alberta farmer out of his mineral rights. Bad move

by Colby Cosh

WHEN the First World War ended, Canadians were eager to do everything they could for the returning soldiers who had served overseas. The intense patriotic love lasted for a while--veterans were given their pick of the good jobs, the prettiest women, the choicest goods. But memories soon began to fade; the survivors of the war mostly just wanted to lead normal lives. Eventually few reminders remained--the poppies of Armistice Day, the Legion halls, and some parcels of land in the West that Ottawa had given to veterans who wanted to homestead.

This last legacy of the war is now the cause of a potentially nasty dispute between the Province of Alberta and the federal government. At stake are $428 million in royalties from the minerals on those Soldier Settlement lands. On February 8, the Alberta government filed a claim against Ottawa for this amount before the Court of Queen's Bench in Edmonton. In a strange twist of fate, the case might never have come up if Ottawa had not tried to take the mineral rights in a soldier spread from an Alberta farmer back in 1970.

The story begins in 1919, when the feds created the Soldier Settlement Board to buy prairie land and teach the soldiers to work it. One of the parcels, a 159-acre plot near Thorsby, about 30 miles southwest of Edmonton, was bought by the government from a homesteader in 1919, transferred to a veteran named Rusty Lynn in 1928, and sold almost immediately to a farmer named Charlie Snider, who moved onto that land with his wife Tillie.

Under the Soldier Settlement law, the Crown was supposed to reserve the mineral rights in the soldier lands to itself. But for some reason, the Soldier Settlement lawyers neglected to mention this reservation in the text of Charlie's land title. Charlie and Tillie lived on the land into the 1960s, believing all the while that the mineral rights were theirs alone. They paid mineral taxes and eventually even earned a modest amount of money on a lease to the Sun Oil Co.

Not long after--perhaps because of an earlier legal dust-up between the Sniders and Rusty Lynn--Ottawa learned of the incongruous situation and decided to play a little hardball to get the mineral rights back. Fred Snider, Charlie and Tillie's son, remembers that in 1970 a "goddamn government lawyer" appeared at the house and presented him with papers. By this time, Charlie and Tillie were deceased and Fred was living on the land as executor of his parents' estate. He is still there today, and while the case is a distant memory, he still sounds angry when he talks about it.

"It would have been easy to give up," says the retired grader operator, "but I wasn't gonna just up and give in to the goddamn government." Thus began one of the longest legal battles in Canadian history. It took 21 years for Canada v. Snider Estate to wend its way to the Supreme Court. By this time, the dispute had boiled down to a single issue. The Sniders had a good title to the mineral rights--under Alberta law. The federal government had a clear claim to them under its own law. So the question was this: in 1930, when Ottawa relinquished ownership of natural resources to the prairie provinces, did the mineral rights in the soldier lands get transferred along with them? In 1991, the Supreme Court answered "yes" by a margin of five to two.

For Fred Snider, the story was over (although he would have "sued the bastards right back, if I hadn't gotten sick of fighting by then"). For Alberta, the case was just beginning. The Snider situation was unusual because the minerals had somehow been omitted from the land title completely. But the vast majority of the titles to soldier lands showed--and still show--the owners of the minerals as the federal Crown. Alberta's Justice Department realized that the Supreme Court had just handed those minerals back to them--and that, just maybe, Ottawa suddenly owed Alberta 61 years' worth of royalties.

It is those royalties for which Alberta is now suing. Normally, Ottawa would have 30 days to respond to the lawsuit, but the Alberta government has waived that deadline, so the suit remains in limbo for the foreseeable future. Federal Justice spokesman Alex Swann says the department's lawyers are studying the province's claim and will respond eventually. Meanwhile, the feds have entered negotiations with the Saskatchewan government for its undisclosed share of the pie. For the federal government, it could end up as a costly reminder to let sleeping dogs lie.

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